Aecon deal should be based on merits, not opponents

Over the past four months, Michael Beattie has been at the forefront of a hard-edged public-relations campaign to sink the $1.5-billion takeover of construction company Aecon Group Inc. by a state-controlled Chinese infrastructure company.

The potential sale to a subsidiary of China Communications Construction Co. Ltd. (CCCC) holds significant implications for Canada's relationship with China. As the federal Liberals weigh giving a thumbs-up or down on the deal, Mr. Beattie has portrayed himself as a veteran construction chief executive, pounding the table for the government to block the bid, which he called "a destructive and destabilizing transaction."

Mr. Beattie was backed by law firm Goodmans LLP and PR agency Navigator Ltd. – the latter's slogan is: "When you can't afford to lose." With these handlers opening doors, he made the rounds in Ottawa with politicians, media outlets (including The Globe and Mail) and the civil servants charged with reviewing the takeover under the Investment Canada Act.

Here's the problem: Mr. Beattie is a fake. He's not a veteran construction CEO. The Globe has learned he's a former $128,000-a-year fleet manager in Caledon, Ont., who was charged in 2016 with committing fraud over $5,000 "by using false invoices to transfer funds" and who was convicted of fraud and perjury in a Quebec court in the 1990s.

The 145-employee company that Mr. Beattie's website stated is based in a downtown Toronto tower turned out to be at an address entirely occupied by a law firm. Mr. Beattie took credit for projects when Aecon's digging showed there's no evidence he ever had a role. The degrees from McGill University and the University of Western Ontario that Mr. Beattie claimed he had were never awarded, according to officials from those universities.

It is like a bad comedy – but for the fact that a $1.5-billion public company and one of Canada's key trade relationships are in play.

CCCC's takeover attracted an ugly response from the start. Journalists were e-mailed the electronic equivalent of plain brown envelopes in December: An anonymous 12-page file stuffed with tales of accidents and corruption at the Chinese company's projects.

Aecon alleged last week that a small faction within the Canadian Construction Association (CCA), the industry's umbrella group, pushed out a news release announcing opposition to the Chinese entity's takeover without consulting with the association's board or membership. The CCA's chair, Chris McNally, said on Monday the decision to oppose the CCCC offer was taken in a manner consistent with the association's rules and based on the perceived threat to both domestic construction companies and their suppliers. At least three major rival Canadian construction firms made a pilgrimage to Ottawa to argue against the takeover.

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These stages of the anti-CCCC public-relations battle hold elements of scaremongering. They hark back to days of reds under beds.

Other countries have allowed the Chinese entity to set up shop. CCCC acquired a major Australian construction company in 2015, and that firm's CEO is out telling anyone who cares to listen that the new parent is good for business. CCCC also owns a U.S. engineering company. Both the Australian and U.S. firms are run by local management teams.

Aecon CEO John Beck is a respected figure who spent five decades building his company into a national powerhouse. He now sees partnering with CCCC as the logical next step in building a global business. It's a rational strategy. Clients are embracing the plan: BC Hydro and Bruce Power signed new contracts with Aecon after the takeover was announced.

Mr. Beattie's round of mud-slinging in Ottawa is simply bizarre. A Bay Street law firm and a well-known PR agency put their credibility behind a fictional construction CEO with a series of fraud charges behind him. Who exactly is footing the bill for that high-priced campaign and what's their motivation?

Is this how Canadians play in global markets?

Goodmans dropped Mr. Beattie as a client on Monday, according to sources close to the firm. Navigator and Goodmans declined to comment on their relationship with Mr. Beattie and their role in the campaign against the Aecon takeover. Mr. Beattie also did not respond to requests for comment.

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Aecon and CCCC announced on Monday that they had extended the timing of the takeover offer by five weeks, to March 30, to give federal watchdogs time to complete a national-security review. That scrutiny is welcome, but it needs to focus on facts. This takeover should not be judged on the merits of arguments made by a man with a checkered history and his well-paid handlers.

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